For the fiscal year ended February 29, 2004, the company reported revenues of $126.1 million, an increase of 39 per cent as compared to fiscal 2003 revenues of $90.9 million. The company reported net income of $14 million for fiscal 2004, or $0.08 per share, compared to a net loss of $6.6 million, or a loss of $0.04 per share, for fiscal 2003. For the fiscal year ended on February 29, 2004, the company reported over 160,000 cumulative sales of Red Hat Enterprise Linux technologies.

"For Red Hat, fiscal 2004 was a year marked by great execution, as we delivered strong growth in revenues, cash flows, and profitability", stated Kevin Thompson, executive vice president and chief financial officer. "The growth rates in the adoption of Red Hat Enterprise Linux has exceeded our expectations to date and we are positive on the outlook for fiscal 2005".

Revenue for the fourth quarter of fiscal 2004 was $37.0 million, a sequential increase of 11 per cent compared to $33.1 million in the third quarter of fiscal 2004, and a year-over-year increase of 43 per cent.

The company generated $32.2 million, or $0.17 per share, in positive cash flow from operations during the fourth quarter, and a total of $61 million, or $0.33 per share, in positive cash flow from operations for the fiscal year ended February 29, 2004. The company ended the year with a cash balance of $941 million, an increase of $649 million as compared to the balance at the end of the previous fiscal year.

In the fourth quarter of fiscal 2004, the company increased its deferred revenue balance to $70.8 million, a sequential increase of $28.6 million, or 68 per cent, as compared to the third quarter of fiscal 2004.

Highlights for the fourth quarter include:

• Fourth quarter sales of subscriptions for Red Hat Enterprise Linux technologies increased by 87,000 new subscriptions, comprising 61,000 subscriptions sold into the enterprise IT market and 26,000 subscriptions sold into the HPC and hosting markets.
• Renewal rates for sales of Red Hat Enterprise Linux remained strong at approximately 90 per cent.
• Gross margins increased to record levels, with blended gross margins at 76 per cent and gross margins of Enterprise subscription technologies at 91 per cent.
• Operating profit, before stock-based compensation, increased to $4.6 million, or 12 per cent of total revenue.